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Wall Street seems to have a chronic case of bipolar disease. Is lower unemployment good or bad? Is tapering good or bad? Are higher interest rates good or bad?

Today’s report of a lower unemployment number, a decline from 7.3% to 7.0% is healthy. Say what you will about the quality of jobs being created, but if more people are earning a paycheck — any paycheck — that’s a good thing. (I would note, also, that the U-6 number is declining even faster than the headline unemployment number, which is really good.) The initial read from Wall Street, however, was that lower unemployment might prompt a faster taper, which is bad.

Now, it’s only a guess but my guess would be that most institutional investors and Wall Street pundits would argue that the monthly $85 billion purchase of bonds by the Fed isn’t helping the economy. So, why would reducing, or tapering purchases be bad? Wouldn’t everyone be happier if the government was printing fewer dollars and buying fewer bonds? If the housing market suffered there’s nothing that says the Fed couldn’t step back down on the stimulus accelerator.

But generally, wouldn’t a faster taper mean the economy is improving enough that, indeed, the Fed believes it can stop or slow its bond buying? Isn’t that good?

This morning Wall Street seems to be in a cheery mood with stocks up and the Dow once again nearing 16000. Maybe the drugs are working, but I wouldn’t count on it.